Economics is the science that studies how people and societies makedecisions that allow them to get the most out of their limited resources.And because every country, every business, and every person has to dealwith constraints and limitations, economics is literally everywhere.

Economics is a social science that studies how people satisfy unlimitedwants with scarce resources. It involves the analysis of choice and tradethrough the use of intuitive graphs and mathematical elements.

The discipline is divided into two sections:

microeconomics (micro)

macroeconomics (macro).

Micro and Macro

Microeconomics studies small-scale economies. That is, from the individuallevel on up to the industry level. Microeconomics is concerned with howconsumers (buyers) and producers (sellers) come together to exchange goodsand services, how much is produced, what to produce, and the going prices.It focuses on the actions of individuals and firms, like the dynamicsbetween buyers and sellers, borrowers and lenders.

Macroeconomics is the branch that studies large-scale economies. Macroeconomicsobserves and analyzes how entire countries, full of many industries and consumers,function. It is not simply the sum of many "microeconomics"; many of the conceptsare entirely different. Where micro will study a single consumer, a paper-clipmanufacturing plant or the airline industry, macro studies the entire economywithin which those three exist. Some of the elements of a large economy thatmacroeconomics considers include inflation, government policies, output growth,and unemployment.

Themes

Economics involves several recurring themes:

Trade - buying and selling goods and services

Models - simplistic situations to understand complex ones

Utility - a measure of people's happiness

Choices - choosing the best allocation of resources

Efficiency - maximizing production and profits

Scarcity - the premise that people only have so much to work with

Costs - "there is no such thing as a free lunch"

Money - who has money, access to it, how it is used, etc.

Consumption - the buyers in the market who form the demand

Production - the sellers in the market who form the supply

Rationality - people doing things with good and logical reasoning

Human Behavior

The field of economics is a social science. This means that economicshas two important attributes:

Economics studies human activities and constructions,

Economics uses the scientific method and empirical evidence to buildits base of knowledge.

Economics is a semi-concrete social science. We must study human behaviorand the choices we make. The assumption that people are rational indicatesthat the discipline focuses heavily on thinking of what would ideally happenin models. Additionally, we have concrete data—numbers—to work with. Formally,economics is the scientific study of the way in which humans make choicesabout production, consumption and wealth when faced with scarce resources.

The fact that economics is in several ways an abstract science means thatvarious economists have differing interpretations of models and the way theworld works. Furthermore, it is difficult to run experiments on socialsituations, especially on a scale as large as an entire nation. Therefore,economists rely on extensive mathematical tools, like econometrics, toanalyze real world situations that have occurred and use that to forecastfuture situations.

Economic history is the study of economies or economic phenomenaof the past. Analysis in economic history is undertaken using acombination of historical methods, statistical methods and theapplication of economic theory to historical situations andinstitutions. The topic includes financial and business historyand overlaps with areas of social history such as demographic andlabor history. The quantitative—in this case, econometric—studyof economic history is also known as cliometrics.

Econometrics is the application of statistical methods to economicdata and is described as the branch of economics that aims to giveempirical content to economic relations. More precisely, it is "thequantitative analysis of actual economic phenomena based on theconcurrent development of theory and observation, related byappropriate methods of inference". An introductory economicstextbook describes econometrics as allowing economists "to siftthrough mountains of data to extract simple relationships".

Business economics is the study of the financial issues andchallenges faced by corporations operating in a specifiedmarketplace or economy. Business economics deals with issuessuch as business organization, management, expansion andstrategy. Studies might include how and why corporations expand,the impact of entrepreneurs, the interactions between corporations,and the role of governments in regulation.

An economic impact analysis (EIA) examines the effect of an event onthe economy in a specified area, ranging from a single neighborhoodto the entire globe. It usually measures changes in business revenue,business profits, personal wages, and/or jobs. The economic eventanalyzed can include implementation of a new policy or project, ormay simply be the presence of a business or organization. An economicimpact analysis is commonly conducted when there is public concernabout the potential impacts of a proposed project or policy.

An economic impact analysis typically measures or estimates the changein economic activity between two scenarios, one assuming the economicevent occurs, and one assuming it does not occur (which is referred toas the counterfactual case). This can be accomplished either before orafter the event (ex ante or ex post).